Seneca Nation of Indians v. New York

575 F.Supp.3d 405

SENECA NATION OF INDIANS, Petitioner,

v.State of NEW YORK, Respondent.

19-CV-735S

United States District Court, W.D. New York.

Signed December 14, 2021

Carol E. Heckman, Lee M. Redeye, Carson R. Cooper, Lippes Mathias Wexler Friedman LLP, John G. Horn, Harter, Secrest and Emery LLP, Buffalo, NY, Riyaz A. Kanji, David A. Giampetroni, Kanji & Katzen, PLLC, Ann Arbor, MI, for Petitioner.

Gregory M. Starner, White & Case LLP, New York, NY, for Respondent.

DECISION AND ORDER

WILLIAM M. SKRETNY, United States District Judge

I. INTRODUCTION

This litigation concerns the Seneca Nation of Indians’ ("the Nation") obligation to pay hundreds of millions of dollars in revenue sharing to the State of New York under the terms of a 2002 gaming compact. In 2019, a panel of arbitrators determined that the compact requires such payments. This Court thereafter confirmed the arbitration award and entered judgment in the State's favor. The United States Court of Appeals for the Second Circuit subsequently affirmed.

Now maintaining that compliance with the judgment would cause it to violate the Indian Gaming Regulatory Act ("IGRA") and face an enforcement action by the National Indian Gaming Commission ("NIGC"), the Nation seeks to vacate the judgment under Rule 60 (b)(6) of the Federal Rules of Civil Procedure.¹ Unpersuaded, this Court finds that the Nation's motion must be denied.

II. BACKGROUND

This Court presumes familiarity with the facts and circumstances of this ongoing dispute, which have been thoroughly discussed in previous decisions. See, e.g., Seneca Nation of Indians v. New York, 420 F. Supp. 3d 89 (W.D.N.Y. 2019) (confirming arbitration award); Seneca Nation of Indians v. New York, 19-CV-735S, 2019 WL 6768779 (W.D.N.Y. Dec. 12, 2019) (granting stay pending appeal); Seneca Nation of Indians v. New York, 988 F.3d 618 (2d Cir. 2021) (affirming confirmation of the arbitration award).

In short, the Nation and the State are parties to a 2002 gaming compact ("the Compact") that governs the Nation's right to conduct casino-style gaming in New York. After the initial 14-year term of the Compact, during which the Nation made revenue-sharing payments to the State in exchange for exclusive gaming rights, the Compact automatically renewed for an additional seven years when neither party objected to renewal. Shortly thereafter, the parties disputed whether the Compact required continued revenue-sharing payments during the 7-year renewal period.

As required under the Compact, the parties submitted their dispute to binding arbitration. After full proceedings before three arbitrators, a majority of the panel interpreted the Compact to require the continuation of revenue-sharing payments during the renewal period. Essentially, the majority found that the Compact directly linked revenue-sharing payments to exclusivity, making the payments due and owing during all periods of exclusivity provided by the State, including during the renewal period. This Court confirmed the arbitration award, and the Second Circuit affirmed.

Throughout the course of the proceedings, the Nation has maintained that the Compact cannot be interpreted to require that revenue-sharing payments be made to the State during the renewal period because the Secretary of the Interior did not explicitly approve such payments, as required by IGRA, 25 U.S.C. § 2710 (d)(8). The majority of arbitrators rejected this argument, finding instead that the approved Compact itself required such payments. See Seneca Nation of Indians, 420 F. Supp. 3d at 95, 103-04 (summarizing the arbitration panel's treatment of the Nation's argument). This Court was similarly unmoved by the Nation's position, finding that the arbitration panel's interpretation of the Compact was not made in manifest disregard of the Secretary-approval requirements. See id. at 103-106. And so too did the Second Circuit reject the Nation's arguments in the course of affirming this Court's confirmation of the panel's award. See Seneca Nation of Indians, 988 F.3d at 626-29.

The Nation continues to press its position but now in a different context: in support of its bid to vacate² the judgment. It maintains that its compliance with the judgment would violate IGRA's Secretary-approval requirements and may subject it to an enforcement action by the NIGC. In support of that argument, the Nation submits two letters from the Department of the Interior (referred to herein at times as "the Department") relating to the Nation's March 21, 2021 inquiry concerning the legality of revenue-sharing payments during the renewal period. See Docket No. 40-7.

The first letter is from the Department to the Nation.³ See Docket No. 40-3. It advises that the Secretary of the Interior "did not review or otherwise analyze any revenue sharing payments for the seven-year renewal period of the Compact because the Compact did not provide for revenue sharing during the renewal period." Id. It goes on to express concern about the arbitration panel's award and serious concern about revenue-sharing payments during the renewal period. See id. The letter concludes by cautioning the parties that the renewal period revenue-sharing payments may not be lawful in light of the absence of the Department's analysis and approval. See id.

The second letter, dated September 15, 2021, is from the Department to the NIGC. See Docket No. 55-1. Therein, the Secretary of the Interior relays the same concerns described above and refers the matter to the NIGC for possible initiation of an enforcement action. See id.

The Nation also submits a third letter, dated September 16, 2021, from the NIGC to the Nation, which advises that the NIGC has begun reviewing the legality of the renewal period revenue-sharing payments in response to a previous inquiry by the Nation and the referral from the Department of the Interior. See Docket No. 51-1.

III. DISCUSSION

The Nation maintains that the Department of the Interior's expressed uncertainty regarding the legality of the renewal-period payments coupled with its referral of the matter to the NIGC for possible initiation of an enforcement action constitutes extraordinary circumstances warranting vacatur of the judgment. Without such relief, argues the Nation, it could suffer extreme and undue hardship by way of an NIGC order requiring it to cease operations for violating IGRA.

The State opposes the motion as procedurally barred and substantively baseless. It maintains that the motion is precluded by the Second Circuit's mandate and Rule 81 (a)(6)(B) of the Federal Rules of Civil Procedure. Alternatively, it argues that the motion fails on the merits because the Nation has not established extraordinary circumstance warranting Rule 60 (b)(6) relief.

A. The Second Circuit's mandate does not bar the Nation's motion.

A district court must follow an appellate court's mandate and give it full effect. Havlish v. 650 Fifth Ave. Co., 934 F.3d 174, 181 (2d Cir. 2019) ; In re Coudert Bros. LLP, 809 F.3d 94, 98 (2d Cir. 2015). The scope of a mandate extends beyond express holdings and precludes re-litigation of matters both expressly and impliedly resolved on appeal. See Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165, 175 (2d Cir. 2014) ; Brown v. City of Syracuse, 673 F.3d 141, 147 (2d Cir. 2012) ; United States v. Ben Zvi, 242 F.3d 89, 95 (2d Cir. 2001).

"But [a] mandate is controlling only ‘as to matters within its compass.’ " In Re Coudert Bros., 809 F.3d at 98 (quoting New Eng. Ins. Co. v. Healthcare Underwriters Mut. Ins. Co., 352 F.3d 599, 606 (2d Cir. 2003) ). That is, an appellate mandate "relates to the record and issues then before the court, and does not purport to deal with possible later events." Standard Oil Co. v. United States, 429 U.S. 17, 18, 97 S. Ct. 31, 50 L. Ed. 2d 21 (1976) (per curiam). A district court therefore does not "flout" an appellate mandate by acting on a Rule 60 (b) motion that relies on subsequent facts not considered by the appellate court. See id.

The State maintains that the Second Circuit's affirmance is the law of the case and cannot be reviewed or disturbed. It argues that in attempting to avoid the judgment, the Nation is merely repackaging the same Secretary-approval arguments that the Second Circuit rejected on appeal: that the arbitration panel's award is inconsistent with IGRA and that the dispute should be submitted to the Department of the Interior for further review. The State therefore contends that the Nation's motion fails to meet the later-event exception in Standard Oil and is thus barred by the mandate.

The Nation disagrees. It maintains that its present motion does not seek to re-litigate matters resolved by the Second Circuit, but rather, is premised on new information from the Department of the Interior confirming that the Secretary never approved the revenue-sharing payments and referring the matter to the NIGC—two post-appeal developments that the Nation contends warrant vacatur of the judgment.

Having reviewed the parties’ arguments, this Court finds that the Second Circuit's mandate does not bar the Nation's motion. Although the State correctly notes that the Second Circuit considered and rejected the Nation's positions concerning the applicability of IGRA's Secretary-approval provisions and the need to submit the dispute to the Department of the Interior, it did so in the context of reviewing the arbitration award before it, not in connection with a request for Rule 60 (b)(6) relief premised on issues relating to enforcement of the judgment. See DeWeerth v. Baldinger, 38 F.3d 1266, 1271 (2d Cir. 1994) (finding that "the district court properly determined that the basis for [the plaintiff's] Rule 60 (b) motion had not been decided either explicitly or by necessary implication by [the appellate court], and that it was therefore free to rule on the [ Rule 60 ] application as it saw fit").

Moreover, the facts underlying the Nation's present motion—that the Department...